Reducing trade with China doesn’t increase jobs, it increases prices

❝ Before announcing import tariffs on more than 1,300 types of Chinese-made goods worth around $60 billion per year, in early March Trump unveiled sweeping tariffs of 25% on steel and 10% on aluminum, which he justified on the basis of national security. Trump insists that a tariff on a small fraction of imported steel – the price of which is set globally – will suffice to address a genuine strategic threat.

Most experts, however, find that rationale dubious. Trump himself has already undercut his national-security claim by exempting most major exporters of steel to the US. Canada, for example, is exempted on the condition of a successful renegotiation of the North American Free Trade Agreement, effectively threatening the country unless it gives into US demands…

❝ As is often the case, Trump seems to be fixated on a bygone problem. Recall that, by the time Trump began talking about his border wall, immigration from Mexico had already dwindled to near zero. And by the time he started complaining about China depressing its currency’s exchange rate, the Chinese government was in fact propping up the renminbi.

Likewise, Trump is introducing his steel tariffs after the price of steel has already increased by about 130% from its trough, owing partly to China’s own efforts to reduce its excess capacity. But Trump is not just addressing a non-issue. He is also inflaming passions and taxing US relationships with key allies. Worst of all, his actions are motivated by pure politics. He is eager to seem strong and confrontational in the eyes of his electoral base.

Neither good sense nor knowledgeable decisions prevail. Trump’s rule by mouth continues to be perfectly acceptable to the ignorant cult of his followers and cowards in Congress.

Watch the sky for Flying Whales


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❝ France has entered the global race to develop a viable cargo airship with a 500-foot blimp designed to lift lumber from deep woodland.

Flying Whales is joining a contest that includes defense giant Lockheed Martin Corp. and a clutch of smaller players. What’s different about the latest project is the combined benefit of the blimp being able to lift an industry-leading 60 tons, but without any requirement for mooring pylons…

❝ “There have been a lot of blimp projects over time and there have been many failures,” Flying Whales founder and Chief Executive Officer Sebastien Bougon said in an interview. “We have a solid base. The wood market alone justifies our investments, and we’ve got low-risk prospects beyond.”

The Flying Whale will be twice as long as a Boeing 747 jumbo jet and have a rigid structure with individual pockets of helium, technically making it an airship rather than a blimp, which relies solely on internal gas pressure. It will be powered by small diesel or electric engines but require minimal power.

I love airships. Being an old fart, I remember the sight of some pretty big navy dirigibles overhead during WW2. Truly impressive.

I want a ride!

Mako unmanned wingman “cleared for takeoff” — and lots of sales!


Kratos

❝ Kratos Defense & Security Solutions has been granted approval by the US government to market its UTAP-22 Mako ‘unmanned wingman’ internationally…

The US State Department has permitted the San Diego-based company to promote its Mako jet-powered unmanned aircraft system to certain undisclosed European and Asia-Pacific region countries.

❝ …The Mako offers fighter-like performance and is designed to function as a wingman to manned aircraft, as a force multiplier in contested airspace, or to be deployed independently or in groups of UASs. It is capable of carrying both weapons and sensor systems.

It will obey all orders. No educated, independent thought allowed.

Earlier post: https://eideard.com/2017/06/18/the-u-s-air-force-is-ready-to-try-disposable-drones/

VW is tooling up 16 plants to build electric autos by 2022


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❝ Volkswagen AG secured 20 billion euros ($25 billion) in battery supplies to underpin an aggressive push into electric cars in the coming years, ramping up pressure on Tesla Inc. as it struggles with production issues for the mainstream Model 3.

The world’s largest carmaker will equip 16 factories to produce electric vehicles by the end of 2022, compared with three currently, Volkswagen said Tuesday in Berlin. The German manufacturer’s plans to build as many as 3 million of the cars a year by 2025 is backstopped by deals with suppliers including Samsung SDI Co., LG Chem Ltd. and Contemporary Amperex Technology Ltd. for batteries in Europe and China.

❝ With the powerpack deliveries secured for its two biggest markets, a deal for North America will follow shortly, Volkswagen said. In total, the Wolfsburg-based automaker has said it plans to purchase about 50 billion euros in batteries as part of its electric-car push, which includes three new models in 2018 with dozens more following.

Can’t happen soon enough for me. We haven’t even narrowed down style for the next new car in our household. Leaders on spec right now are the Tesla pickup and the VW Mini-Micro. Electric-only folks.

Over half of US coal mined in 2017 came from 5 companies

More than half of the coal produced in the U.S. comes from five companies, with the largest company producing one in every five tons.

Peabody Energy Corp. far outproduced any other coal company in 2017 with 156.7 million tons from U.S. operations, a 20.3% share of the total coal produced in the U.S. Nearly two-thirds of Peabody’s production came from a single mine, the North Antelope Rochelle mine in Wyoming, which is itself responsible for 13.1% of the coal produced in the entire country…

❝ “We’ll take a look at where our customer requirements are later as we progress through the year and see where we end up, but we are very focused on maintaining strong margins out of that basin,” Peabody Executive Vice President and CFO Amy Schwetz said Feb. 7…

Just to smell the money and power coal still has over a political economy…consider…

❝ In Wyoming, for example, two companies — Peabody and Arch — mine 64% of the coal in the state. Murray Energy controls 36% of the coal produced in West Virginia, while Alliance Resource Partners LP produced 39.7% of the coal mined in Kentucky in 2017.

How many politicians do you think they own – they might need to own – in a state, in Congress, to always get their way?

“Old” Energy buys into “New” Energy

❝ A decade ago, EON SE and RWE AG were two of Germany’s most valuable companies and their businesses were roughly similar: they generated power (much of it from coal and nuclear), ran energy networks and sold electricity to end consumers.

The complex asset swap and share issue they announced over the weekend — including the divvying up of RWE-controlled Innogy SE’s assets — is the last death knell for that all-encompassing model. EON will become a company focused purely on energy networks and retail customers, while RWE will combine the two companies’ renewables businesses.

❝ If EON and RWE can prevail, other utilities may follow. Utility investors would then be able to decide what future they believe in: a world where solar and wind energy is cheap and so what matters are cash-generating networks and end-customers (EON). Or one in which the whole economy is electrified and the electricity generator is king (RWE). At least we’d have a choice.

Either road, we consumers, citizens of Planet Earth, stand a better chance for an affordable, long and healthful life.

Navarro gets his 15 minutes of fame for Trump tariffs

❝ Peter K. Navarro has been taking a public victory lap to celebrate his success at persuading President Trump to announce tariffs on steel and aluminum imports…

Navarro, the director of the White House’s Trade and Manufacturing Policy office, has become ubiquitous on television since last Thursday, in appearances that have been at turns triumphal and testy. His outspoken bluntness has quickly turned him into one of the biggest lightning rods in Washington.

❝ After getting sidelined and effectively demoted by Chief of Staff John F. Kelly last fall, many advisers might have looked for other jobs. But Navarro had nowhere else he wanted to go. So he stuck it out. Now he’s back in the room where it happens.

Conservative economists, business executives and Republican elites who support free trade hate him for that, and they now speak of Navarro like he is a boogeyman.

Navarro’s years in academia reflect the slogan oldie – “Those who can’t do, teach?” Certainly invalid much of the time, most economists and financial advisors I listen to say it’s spot on in Navarro’s life and work.